We couldn't help but notice how frighteningly similar that $1.2 billion number is to the current valuation of Jive, another social networking app for the enterprise — also worth $1.2 billion.

Clearly Microsoft was willing to pay a huge premium for an enterprise social networking application.

Now it faces the daunting challenge of integrating Yammer, a social networking application for the enterprise, and all its employees with Microsoft's culture in the Office group.

That's not to mention all the integrations it's going to require with apps like Office 365, its online document-editing suite, and Skype. But Yammer plugs a hole that Sharepoint, Microsoft's flagship enterprise application, failed to fill.

We caught up with Tony Zingale, CEO of Jive, to see what his thoughts were. Here's what we learned:

Sharepoint isn't going anywhere. This deal is just an acknowledgment from Microsoft that Sharepoint is not a solution to social networking in the enterprise.

Microsoft's biggest challenge will be executing the acquisition. Yammer is joining the Office group in Microsoft and will be coordinating with a bunch of different projects. It will be challenging to coordinate all those new employees.

Microsoft isn't traditionally good at keeping up innovation. Closing an acquisition is a tough process to manage, and that's going to slow down innovation at both Yammer and Microsoft.

Here's a lightly edited transcript of the interview:

BUSINESS INSIDER: What's your knee-jerk reaction to the deal?

Tony Zingale: Well, it was Silicon Valley's worst-kept secret. But for one, it's an immense validation of the space. Obviously a company like Microsoft, who has claimed to have had a social platform called Sharepoint, clearly the emperor has no clothes, as is evidenced by the size of this acquisition. They attempted to go after a social platform in 2007 and 2010, and again they'll try next year. It leaves Jive as the only pure-play and it validates our leadership.

You gotta throw a whole bunch of questions at Microsoft's ability to execute here. The confusion around Yammer being a standalone identity but part of the Office group. integrated with Skype, Office 365, etc… That's four different groups with a staff that's trying to innovate as fast as possible. That's gonna be a tough process to manage. It's gonna slow the innovation down significantly. It's gonna be a tough transition for the Yammer customers that have actually paid them. We see that as an opportunity to bring in more customers.

BI: What about the price? It seems awfully similar to Jive's current market cap.

TZ: I'm not gonna comment on what our value is, that's why we're a public company, that's why we disclose everything. I'll let our business results speak for itself. Clearly, a $1.2 billion all cash offer for a company that that is trying to provide a fuller solution than the narrow micro-blogging activity stream… I think it spells absolutely a little desperation on Microsoft's part. They were behind Salesforce.com with Dynamics, the need to integrate Yammer in that to compete with Salesforce and Chatter.

I think it shows that this market is massive. If you don't have a viable offering in the space, then you better get one. That price tag speaks to the urgency, the size of the market opportunity, the failings of Sharepoint in the space. The need to have social capabilities in other properties. It just shows that it's all moving in this direction. That's what you do, you acquire and you hope that it's going to fit technically and culturally such that you can pick up the pace of delivery. I think it's going to be very challenging for Microsoft, given the scope of what's required and their ability to executive. That's a hefty price tag.

BI: Are there any companies that should be worried right now?

TZ: I don't know that anybody's worried. if you're talking about Google, and the ability of Office 365 to compete with Google Docs, I don't think they're worried. I don't think Salesforce is worried with Dynamics and Chatter. I don't know if WebEx is worried with its ability to compete with Skype.

The guys that should be worried were the guys that were limping on top of Sharepoint. All these privately held companies that were hanging around and latched on to Sharepoint, those guys are in deep trouble today. Public companies that have proven positions in the spaces, I don't think they should be worried.

BI: Does this mean that Sharepoint is dead?

TZ: Sharepoint, take it for what it is: an outstanding and world-class content management system. It's employed in most enterprises around the world, it's great at that. What it is not is a social platform that exists inside and outside the enterprise that's movable, that can go to the cloud. One that embraces other enterprise applications. Sharepoint is not that. The hope is that Yammer can fill that gap in short order. It remains to be seen from an execution point of view if they can close the gap. Sharepoint is alive and well for what it was designed and delivered to be.